Thomas Aplin & Co. Ltd V. Northern Nigeria Development Corporation (1972)

LawGlobal-Hub Lead Judgment Report

ELIAS, C.J.N.

In the Lagos High Court, two Suits No. LD/237/67 and No. LD/344/67 were consolidated into one. In Suit No. LD/237/67, the plaintiff’s claim from the defendants the sum of 316,134 pounds, being balance of fees due to and payable in respect of services performed by the plaintiffs as managing agents of defendants’ company K. Maroun (Pork Products) Ltd. Under an agreement contained in letters dated 22nd February, 1964, 13th April, 1964 and 28th July, 1964. In Suit No. LD/344/67, the plaintiffs who are the defendants in Suit No. LD/237/67, claim for “an account of all moneys received by the defendants for and on behalf of K. Maroun (Pork Products) Limited at all material times when the defendants acted as managing agents for K. Maroun (Pork Products) Limited a subsidiary of Northern Nigeria Development Corporation and payment over to the plaintiffs of any outstanding moneys not duly accounted for.”

Pleadings were ordered and filed. In due course, both parties asked for and were granted leave to amend their pleadings. The relevant paragraphs of the amended statement of claim in Suit No. LD/237/67 are as follows:-

“1. The plaintiffs are a limited liability company incorporated in Nigeria whilst the defendants are a corporation incorporated under the Development Corporation Law 1955 having power thereunder to appoint agents.

7. By letters dated the 13th April, 1964 and the 28th July, 1964, the defendants appointed the plaintiffs as their managing agents for the said business of K. Maroun (Pork Products) Limited at Apapa on a more permanent basis and at an annual remuneration of 10,300 pounds per annum and upon the other terms set out in exhibits A and B to the affidavit deposed by Leonard David Lucas in support of the particulars of claim herein.
8. The plaintiffs acted as managing agents as aforesaid under the preliminary agreement from the 22nd February, 1964 to the 13th April, 1964 and under the agreement referred to in the preceding paragraph hereof from the 13th April, 1964 until the 22nd August, 1966 during which period a total of 26,084:13:4 pounds became due and payable to them as remuneration from the plaintiffs.”

On the other hand, the relevant paragraphs of the amended statement of defence are as follows:-

1. The defendants admit paragraphs 1, 2, and 7.
2. The defendants will contend at the hearing that the plaintiffs utilised the facilities of K. Maroun (Pork Products) Ltd. in promoting their own business.
3. The defendants will contend that the plaintiffs were in breach of their undertaking.
4. The defendants will contend that the action is not maintainable and should be dismissed.”

The relavant paragraphs of the amended statement of claim in Suit No. LD/344/67 are as follows:-

“3. The defendants failed and neglected to render any or proper accounts of all monies paid and received on behalf of the plaintiffs during the managing period.

4. The plaintiffs will contend at the trial of this action that the defendants during the period aforementioned made use of the properties of Messrs. K. Maroun (Pork Products) Ltd. to run their own business.
5. The plaintiffs will also contend at the trial that apart from making use of the personnel of K. Maroun Ltd. to run their own business, the defendants failed to operate a separate account for the business of the plaintiff’s company.
6. The plaintiffs aver that without any approval from the plaintiffs or its subsidiary i.e. K. Maroun (Pork Products) Ltd. the defendants through their agent i.e. Mr. Elks procured a pharmaceutical shop for K. Maroun (Pork Products) Ltd. at a total cost of 2,557pounds-10s-0d to enable it to engage in the sale of drugs which K. Maroun (Pork Products) Ltd. had no licence to operate.
7. The defendants through their agents bought a generator for 10,160pounds without prior authorisation by or intimation with K. Maroun (P.P.) Ltd. or the plaintiffs when it was not needed and the said generator had to be sold for 6,000 pounds thus incurring a loss of over 4,000 pounds for K. Maroun (P.P.) Ltd.
8. At all material times the manager i.e. Mr. Elks provided for K.

Maroun (P.P.) Ltd. by the defendants was operating several other business concerns for the defendants and using the secretariat facilities of K. Maroun (P.P.) Ltd. without corresponding adjustment for charges incurred.

9. An accountant by the name of Mr. Agwuh provided by the defendants was paid a total of over 1,000 pounds by K. Maroun (P.P.) Ltd. contrary to the terms of the management agency.
10. Mr. Elks the manager used the secretariat of K. Maroun (P.P.) Ltd. for the SAAB agency and stocked SAAB cars for sale on the premises of K. Maroun (P.P.) Ltd., without any corresponding charges credited to the account of K. Maroun (P.P.) Ltd.
11. The plaintiffs will further rely on the provisional agreement dated 20th February, 1964 which spells out in detail the scope of the management agency.
12. The plaintiffs will contend that on the face of the preceding averments in paragraphs 4-10 there had been a partial failure of consideration which should be taken into account in computing what fees should be payable to the defendants.”

For their part, the defendants adopt their amended statement of defence and say as follows:-

“1. That the plaintiffs i.e. Thomas Aplin & Co. Ltd., were in breach of their agency agreement in the manner set out in the particulars already filed.

2. That the accountant provided was an employee of the defendants and not an employee of the plaintiffs, which is a breach of the agency agreement.
3. That the said accountant did not work for the whole period material to the plaintiff’s claim.
4. That the general manager provided by the said plaintiffs was thoroughly incompetent with no knowledge whatsoever of pork and pig production and administration contrary to the import of the agency agreement.
5. That due to the incompetence of the said general manager, K.

Maroun (P.P.) Ltd. i.e. the subsidiary of the said defendant incurred substantial losses and the general manager engaged in extraneous and wasteful ventures at K. Maroun (P.P.) Ltd.’s expense to the detriment of K. Maroun (P.P.) Ltd.

6. The said extraneous wasteful ventures relate to:-

(1) the procurement of a pharmaceutical shop at a total cost of 2,557 pounds:10/- for sale of drugs for which K. Maroun (P.P.) Ltd. had no licence to operate.

(2) the purchase by the said general manager at K. Maroun’s expense of a generator for 10,160 pounds which was later sold for 6,000 pounds thus incurring a loss of 4,160 pounds for the said K. Maroun (P.P.) Ltd.

7. That the said general manager was at all material times operating

other business concerns on the K. Maroun’s premises, e.g. SAAB cars agency and agency for Northern Assurance Co. Ltd., and using the secretariat facilities of K. Maroun.